Contrary to popular belief, estate planning goes far beyond simply drafting a Will. Although a Will is undoubtedly an important component of any estate plan, dictating how your assets will be distributed after your passing, it’s not the only instrument at your disposal. One tool you can utilize to ensure your wishes are met is beneficiary destination. If you fail to name a beneficiary for your bank accounts, your heirs may need to go through Probate, which can be a costly and time-consuming process. Please continue reading as we explore how to designate beneficiaries for your bank accounts and how a skilled Washtenaw County Estate Planning Attorney can help you navigate this complex process.
What Are the Advantages of Beneficiary Designations?
When planning your estate in Michigan, there are several strategies you can employ to help safeguard your hard-earned assets and provide for your loved ones. One such option is beneficiary designations, which allows you to specify who will receive assets like life insurance, retirement accounts, and certain financial accounts upon your death. It’s crucial to understand that you can name a beneficiary to inherit your bank accounts.
A key advantage of designating beneficiaries for your bank accounts is avoiding the Probate process. Assets with beneficiary designations are transferred directly to the named beneficiaries. As such, there is no need for Probate proceedings. You can also ensure your wishes are followed by dictating who receives your assets, rather than relying on the default rules of intestacy. Furthermore, beneficiary designations typically take precedence over a Will, which means that assets will be distributed as designated on the account, not necessarily as stated in your Will.
How Do I Designate Beneficiaries for My Bank Accounts?
If you are looking to designate beneficiaries for your bank accounts, you may be surprised to discover that this process is relatively straightforward. Generally, you will need to reach out to your bank’s customer service or visit a local branch to request a Payable-on-death (POD) form for your accounts. In some cases, this may be referred to as a Totten Trust Fund, which automatically transfers funds to the named beneficiary on your death, bypassing the Probate process. You will need to fill out the form with information about your beneficiaries such as their full legal names, dates of birth, addresses, and Social Security numbers.
It’s important to note that you can designate multiple beneficiaries and specify the percentage of the account assets each beneficiary should receive upon your passing. While it’s not required, it’s advisable to inform your beneficiaries that you have designated so that they are aware of the process and can take the necessary steps upon your death.
As you can see, there are numerous benefits to designating beneficiaries for your bank accounts. When you are ready to plan your estate, it’s in your best interest to connect with an experienced attorney from Collis, Griffor, & Hendra, who can help you understand your options and ensure you have peace of mind for the future. Contact our legal team today to learn how we can assist ou in safeguarding your assets.
